Jail pays city $7K for utility charge


By Jon Hawley
Staff Writer

Monday, May 28, 2018

Albemarle District Jail has paid the city of Elizabeth City roughly $7,000 the city was seeking in demand charges for electricity, a step toward resolving their public dispute over the bill.

The four-member jail commission agreed last week to pay $6,938 in electric demand costs incurred in September. The demand charge occurred after a city-provided generator broke down and couldn't be used to offset the jail's demand on the electrical grid, a common practice known as “peak shaving.”

Jail Administrator Robert Jones and jail attorney Herbert Mullen had argued to City Council last week the extra demand charge was the city's fault, and the jail shouldn’t have to pay it.

Council rejected their request, however, noting the city never promised to absorb demand charges if generators broke down.

Council also went a step further and said the city would give the generator to the jail, giving it control over the device while also freeing the city of its long-term costs of repair and replacement.

In a letter early last week, Mullen reported the jail has paid the demand charge and is also willing to accept the generator. He asked the city enter into a two-page agreement that would convey ownership of the generator to the jail and commit the jail to continue providing space for the city's metering equipment.

However, City Manager Rich Olson said the jail's contract offer is not acceptable, and he's drafting a response to Mullen.

The terms of the jail's electrical service are already defined through the city's “GS3” rate, and the city is legally required to provide the same terms and conditions to all customers of a given rate class, Olson explained.

Though jail officials are still waiting on the city's response, they may still get the generator one way or another. That gives them both an asset and a liability, as city officials have estimated replacing the generator could cost more than $600,000.

In a phone interview, Jail Commission Chairman Ed Muzzulin explained the generator shouldn't be an immediate or large problem for the jail. The generator should have eight to 10 years left before it has to be replaced, he said. When it does need replacing, Muzzulin said the jail could meet its needs with a smaller, less-expensive generator.

The jail uses a generator not only for peak-shaving but to ensure the jail never loses power. Though Olson has said utility customers with a guarantee of uninterrupted power have two generators, Muzzulin said buying a second generator would require installing a parallel switch. That would get very expensive, he said.

Olson also wrote in an email last week that the generator could last more than 20 years, if maintained.

Though requiring the jail to pay the roughly $7,000 demand charge, the city did not charge the jail for repairing the generator or spending nearly $11,000 to bring in a temporary generator to protect the jail in case of a power outage. It also waived late fees, Olson said.